Nigeria’s media and entertainment industry, widely known as “Nollywood,” has grown into a globally recognized powerhouse since its inception in 1992. As the second most prolific film industry in the world, Nollywood produces approximately 2,500 movies annually, contributing significantly to various aspects of film production, including scriptwriting, directing, cinematography, acting, sound, and editing. Key production hubs in the country include Lagos, Onitsha, Enugu, Asaba, and Abuja.
Economic Impact and Growth Potential
According to PwC’s Global Entertainment and Media Outlook for 2022-2026, Nigeria’s media and entertainment sector is among the fastest-growing creative industries globally. The industry contributed 2.3% to Nigeria’s GDP in 2021, amounting to $660 million (239 billion naira), and is projected to increase its export revenue earnings to over $1 billion. The combined motion picture and music sectors generated around $1.8 billion (730 billion naira) in GDP contributions in 2020. The sector’s growth is largely driven by subscription-based revenue, with significant participation from global streaming giants like Netflix, Iroko TV, and Amazon Prime Video.
Television and Video Market Expansion
Nigeria’s television and video market has experienced steady growth, with revenues increasing from $732 million in 2018 to $806 million in 2020. This market is expected to reach about $900 million by 2023, driven primarily by subscription revenue, which accounted for over 70% of total sector earnings in 2018. Despite challenges, Nigeria will overtake South Africa in pay TV subscriptions in 2020, boasting over 6.9 million pay TV households by 2021, with projections to reach 7.4 million by 2023.
Music Industry Growth
The Nigerian music industry has also witnessed remarkable growth, employing approximately a million people and generating over $8 billion for the economy as of 2021. The industry’s vibrant scene has produced globally acclaimed artists like Wizkid and Burna Boy, who have garnered prestigious awards, including the Grammys. The rise of new production studios and the expansion of global music streaming platforms like Spotify have further fueled the sector’s growth. The music streaming market alone is projected to generate over $113 million by the end of 2022.
Challenges Facing the Industry
Despite its growth, the Nigerian media and entertainment industry faces several challenges. Piracy remains a significant issue, hindering the monetization of content and stifling industry development. Poor infrastructure, such as inconsistent power supply and inadequate road networks, increases production costs and timelines, particularly for movie and music productions. Regulatory uncertainties, such as the amended broadcasting code introduced in 2020, which regulates content exclusivity and pricing, further complicate the business environment.
Naira devaluation and value-added tax (VAT) hikes also strain the industry, particularly for subscription service providers who must fulfill foreign content obligations in dollars. Additionally, contract-related issues, employment and labor law disputes, and defamation concerns pose legal challenges for industry stakeholders.
Opportunities in the Nigerian Media and Entertainment Sector
Despite these challenges, significant opportunities exist for investors and entrepreneurs in Nigeria’s media and entertainment sector. These include the establishment of cinemas in underserved areas, digital distribution platforms, and training facilities for cinematography, scriptwriting, and directing. U.S. companies, in particular, have a competitive edge, as local entrepreneurs often prefer U.S.-origin equipment for its perceived quality and reliability.
Other opportunities include the creation of consultancy services to expand content reach and digitize media, mergers and acquisitions to support growth among national players, and collaborations with global film producers for festivals and media tourism. The Nigerian government has also launched initiatives such as the Creative Industry Financing Initiative (CIFI) to boost industry growth by providing flexible loans with favorable interest rates to film production and distribution businesses.
Government Initiatives Supporting Industry Growth
The Nigerian government has made several efforts to support the media and entertainment industry. The Creative Industry Financing Initiative, developed by the Central Bank of Nigeria in collaboration with the Bankers’ Committee, offers flexible loans to businesses in the film sector. Additionally, the Nigerian Communications Commission has established guidelines to promote increased internet access, which is vital for the digital distribution of content. Efforts are also underway to improve fiber optics deployment, which will enhance connectivity and support the streaming of movies and other entertainment content.
General View
Nigeria’s media and entertainment industry is a dynamic and rapidly growing sector with significant economic potential. While challenges such as piracy, poor infrastructure, and regulatory uncertainties persist, the industry’s resilience and the government’s supportive initiatives provide a fertile ground for growth and investment. As global interest in Nollywood and the Nigerian music scene continues to rise, the industry is well-positioned to expand its influence and contribute even more to the country’s economy.
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Written By Fortune Davidson